from the making-astrology-look-respectable dept

Given the magnitude of the effect that TAFTA/TTIP could have on the economies and daily life of both the US and EU, it is surprising that there has not been more analysis of its likely impact. In particular, you would have thought that the governments who favor it would have made great efforts to deploy plenty of evidence supporting the agreement. Instead, the European Commission simply repeats the same set of figures from the 2013 analysis that it commissioned from the London-based CEPR group (pdf), while the US side seems to think even one study is one too many.

Analyses from the public's political representatives are also surprisingly thin on the ground. That makes a new report from one of the UK Parliament's specialist committees, which are made up of current MPs, particularly welcome. It comes from the Business, Innovation and Skills (BIS) Committee, so you might expect it to be really upbeat about the TTIP negotiations. Instead, it is pretty unimpressed by the debate so far:

The BIS Committee finds that while a lack of detail on negotiations makes it difficult to assess the benefits of TTIP, all involved in the debate -- campaigners, lobbyists, business groups, the UK Government and the European Commission -- must ensure they take an evidence-based approach when assessing TTIP’s potential.

The report focuses on two main areas: TTIP's economic benefits and the corporate sovereignty provisions, also known as investor-state dispute settlement (ISDS). As it notes, the main figures used time and again in support of the trade deal come from the European Commission's CEPR report. Leaving aside its many debatable assumptions, one key fact that has emerged is that the core prediction for the best-case scenario -- US and EU economies to grow by 0.4% and 0.5% respectively as a result of TTIP -- refers to cumulative growth by 2027, and therefore amounts to around 0.05% extra GDP per year, on average. Regarding this fact, the economist Dean Baker wrote: "As growth policy, this trade deal doesn't pass the laugh test." On this issue, the Committee commented:

When we challenged the [UK Trade] Minister on the accuracy of the estimated benefits of TTIP, he appeared to agree that they should not be taken as fact. In doing so he quoted JK Galbraith, who said that the only purpose of economic forecasts was to make astrology look respectable.

The Committee was equally unimpressed with the arguments in favor of including a corporate sovereignty chapter:

We have yet to be convinced of the need for ISDS provisions in TTIP. The UK Government and the EU must demonstrate that the advanced legal institutions of the EU and the US cannot protect foreign investors before any ISDS is considered in the TTIP.

Again, coming from a naturally pro-business Parliamentary Committee, that's a pretty damning comment. It shows just how much work the US and EU governments need to do in order to convince people -- even those favorably inclined to the idea -- that TAFTA/TTIP is worth bothering with at all.

from the transparency! dept

For years now, we've been trying to understand why the US Trade Rep (USTR) is so anti-transparency with its trade negotiations. It insists that everything it's negotiating be kept in near total secrecy until everything is settled, and the public can no longer give input to fix the problems in the agreement. It's a highly questionable stance. Whenever this criticism is put to the USTR directly, it responds by saying that it will listen to anyone who wants to come and talk to the USTR. But, as we've explained multiple times, "listening" is about information going into the USTR. "Transparency" is about information coming out of the USTR. They're not the same thing by any stretch of the imagination.

As the fight over new trade agreements gets louder and louder, a key stumbling block is having Congress approve so-called "fast track authority" or "Trade Promotion Authority," which basically means that Congress can't even jump in to try to fix the problems in whatever the USTR negotiates -- it can only give a straight "yes" or "no" vote on the entire package. For reasons that aren't entirely clear, Congressional Republicans are all for this, even though it means directly giving up Congress's Constitutional authority to a President that the Republicans appear to hate. Meanwhile, Democrats seem reasonably skeptical of these new trade deals.

As the Obama administration gives House Democrats a hard sell on a major controversial trade pact this week, it will be doing so under severe conditions: Any member of Congress who shares information with the public from a Wednesday briefing could be prosecuted for a crime.

Yes, the USTR has declared that the briefing is entirely classified. Why? Mainly to keep the details secret from the American public. As Rep. Alan Grayson notes:

"It is part of a multi-year campaign of deception and destruction. Why do we classify information? It's to keep sensitive information out of the hands of foreign governments. In this case, foreign governments already have this information. They're the people the administration is negotiating with. The only purpose of classifying this information is to keep it from the American people."

The USTR's lame response to all of this is that any member of Congerss is allowed to come to its office and see the text of the negotiating documents. But that's misleading in the extreme. As we've discussed before, the USTR tells elected officials that they can't copy anything, take any notes, or even bring staff experts on trade agreements (or related issues)... even when those staffers have security clearance.

We pointed out this was a problem back in 2012 and it appears to be ongoing. The Huffington Post article above quotes Rep. Rosa DeLauro who appears to be having the same problem:

"Even now, when they are finally beginning to share details of the proposed deal with Members of Congress, they are denying us the ability to consult with our staff or discuss details of the agreement with experts. This flies in the face of how past negotiations have been conducted and does not help the Administration’s credibility. If the TPP would be as good for American jobs as they claim, there should be nothing to hide."

Rep. Lloyd Doggett also seems amazed that his staffers with security clearance are blocked from getting information about the TPP agreement:

"I tried to find out what level of classification applies," he said. "Can my top cleared staff read it? If he can hear about ISIS, is there something in here that prevents him from seeing these trade documents?"

It really does make you wonder, once again, just what is the USTR hiding here? There is simply no reason to keep these details secret -- except if you know that the American public won't approve of them.

from the they-said-it-couldn't-be-done dept

As we noted recently, one of the most worrying aspects of corporate sovereignty chapters in trade agreements is the chilling effect that they can have on future legislation. That's something that the supporters of this investor-state dispute settlement (ISDS) mechanism never talk about. What they do say, though, is that corporate sovereignty cannot force governments to change existing laws. A recent defeat for Canada before an ISDS tribunal proves that's not the case:

An international trade tribunal has ordered Ottawa to pay ExxonMobil and another oil company $17.3 million, following a complaint that the companies were required to spend money in Newfoundland and Labrador on research and development.

The case was brought by ExxonMobil using the corporate sovereignty provisions in the North American Free Trade Agreement (NAFTA), and concerned another agreement, called the Atlantic Accord. As CBC News explains:

Under the terms of the Atlantic Accord, a federal-provincial agreement on oil development first negotiated in 1985, oil companies are required to support petroleum-focused research and development in Newfoundland and Labrador, as part of its local benefits package.

In other words, three decades ago, Canadian politicians had passed a research and development package, one of whose measures was designed to boost local employment -- exactly the kind of thing that voters want their politicians to do. But the ISDS tribunal ruled that under NAFTA, this was not permitted, and awarded substantial damages to ExxonMobil for being required to comply with the Atlantic Accord. But it gets worse:

Unless the governments of Canada and Newfoundland and Labrador agree to change the R&D legislation, Ottawa could be on the hook for continued damages. The federal government is responsible because NAFTA is an agreement between sovereign nations.

That is, the corporate sovereignty provisions in NAFTA are being used to force the Canadian government to change existing and long-standing legislation -- something that ISDS fans assure us never happens.

from the up-is-down,-black-is-white dept

Sen. Ron Wyden and Sen. Orrin Hatch are now in a stand-off over a bill that would put secretive trade deals like the Trans-Pacific Partnership (TPP) agreement on the Fast Track to passage through Congress. The White House meanwhile, has intensified their propaganda campaign, going so far as to mislead the public about how trade deals—like the TPP and its counterpart, the Transatlantic Trade and Investment Partnership (TTIP)—will effect the Internet and users' rights. They are creating videos, writing several blog posts, and then this week, even sent out a letter from an "online small business owner" to everyone on the White House's massive email list, to further misinform the public about Fast Track.

In a blog post published this week, the White House flat out uses doublespeak to tout the benefits of the TPP, even going so far as to claim that without these new trade agreements, "there would be no rules protecting American invention, artistic creativity, and research". That is pure bogus, much like the other lies the White House has been recently saying about its trade policies. Let's look at the four main myths they have been saying to sell lawmakers and the public on Fast Track for the TPP.

Such an obligation could be a good or a bad thing, depending on what kind of impact it could have on national censorship, or consumer protections for personal data. It's a complicated issue without an easy solution—which is exactly why this should not be decided through secretive trade negotiations. These "free flow of information" rules have likely been lobbied for by major tech companies, which do not want laws to restrict them on how they deal with users' data. It is dishonest to say that what these tech companies can do with people's data is good for all users and the Internet at large.

Myth #2: Fast Track Would Strengthen Congressional Oversight

The second, oft-repeated claim is that Fast Track would strengthen congressional oversight—which is again not true. The U.S. Trade Representative has made this claim throughout the past couple months, including at a Senate Finance Committee hearing in January when he said:

TPA puts Congress in the driver’s seat to define our negotiating objectives and strengthens Congressional oversight by requiring consultations and transparency throughout the negotiating process.

Maybe we could believe this if the White House had fought for Fast Track before delegates began negotiating the TPP and TTIP. Maybe it could also have been true if that bill had ensured that Congress members had easy access to the text and kept a close leash on the White House throughout the process to ensure that the negotiating objectives they had outline were in fact being met in the deal. However, we know from the past several years of TPP negotiations, that Congress has largely been shut out of the process. Many members of Congress have spoken out about the White House's strict rules that have made it exceedingly difficult to influence or even see the terms of these trade deals.

The only way Fast Track could really put "Congress in the driver's seat" over trade policy would be if it fully addressed the lack of congressional oversight over the TPP and TTIP thus far. Lawmakers should be able to hold unlimited debate over the policies being proposed in these deals, and if it comes to it, to amend their provisions. It would be meaningless if the new Fast Track bill enabled more congressional oversight, but if it did not apply to agreements that are ongoing or almost completed.

Myth #3: Small Online Businesses Would Benefit from Fast Track

Then the third misleading claim is that Fast Track would help small businesses. Their repetition of this has become louder amid increasing public awareness that the TPP has primarily been driven by major corporations. What may be good for established multinational companies could also benefit certain small online businesses as well. The White House says that tariffs are hindering small online businesses from selling their products abroad, but research has shown that the kinds of traditional trade barriers, like tariffs, that past trade agreements were negotiated to address are already close to non-existent. Therefore it is unclear what other kind of benefits online businesses would see from the TPP.

Even if there were some benefits, there are many more ways that the TPP could harm small Internet-based companies. The TPP's copyright provisions could lead to policies where ISPs would be forced to implement costly systems to oversee all users' activities and process each takedown notice they receive. They could also discourage investment in new innovative start-ups, even those that plan to "play by the rules", due to the risk that companies would have to sink significant resources into legal defenses against copyright holders, or face heavy deterrent penalties for infringement established by the TPP.

Myth #4: TPP and Other Secret Trade Deals Are a National Security Issue

The last, and most confounding of the White House's assertions is that the TPP and TTIP are an "integral part" of the United States' national security strategy, because its "global strategic interests are intimately linked with [its] broader economic interests." As we have seen with the U.S. government's expansive surveillance regime, "national security" is often invoked for policies even if they directly undermine our civil liberties. It is hard to argue with the administration whether the TPP and TTIP are in fact in the United States' economic or strategic interests, since only they are allowed to see the entire contents of these agreements. Either way, it seems like a huge stretch to say that we can trust the White House and major corporate representatives to determine, in secret, what is in fact good digital policy for the country and the world. We may be hearing this line more and more in the coming weeks as the White House becomes more desperate to legitimize the need for Fast Track to pass the TPP and TTIP.

Conclusion

The fact that the White House has resorted to distorting the truth about its trade policies is enough to demonstrate how little the administration values honesty and transparency in policy making, and how much the public stands to lose from these agreements negotiated in secret. The more they try and espouse the potential gains from Fast Track—while the trade agreements this legislation would advance remain secret—the more reason we ought to be skeptical. If the TPP is so great and if Fast Track would in fact enable more democratic oversight, why are the contents of either of them still not public?

from the definite-maybe dept

Techdirt has been writing about corporate sovereignty for nearly two years now. The public is beginning to wake up to the dangers it poses, which means that politicians, too, are suddenly discovering that they need to have an opinion on the subject. Over in the European Union, attention is focused on the S&D (Socialists and Democrats) Group in the European Parliament. Because of the way seats were won in the recent EU elections, it is the S&D group that will make or break TTIP/TAFTA; that makes its position on investor-state dispute settlement (ISDS) crucial. This week, the S&D Group published a position paper that gives some insight into its thinking on this issue (pdf). Here's the opening statement:

The S&D Group opposes the inclusion of ISDS in Trade Agreements in which other options to enforce investment protection are available, whether domestic or international. In agreements with countries that have fully functioning legal systems and in which no risks of political interference in the judiciary or denial of justice have been identified, ISDS is not necessary.

That seems clear enough: "opposes the inclusion," "ISDS is not necessary." But of course, statements from political groups are never that simple. Later on, the paper says:

The S&D Group has already on numerous occasions expressed its serious reservations concerning ISDS. In particular in the case of TTIP, we have made it clear that we do not see a need for its inclusion and have called for it to be excluded when negotiations for the investment chapter start.

Here, the S&D Group does not "see a need for its inclusion" of ISDS in TTIP, which is a rather weaker statement. The paper concludes:

We have an interest in a good TTIP that becomes a gold standard agreement. We do not want to see this opportunity jeopardized by the inclusion of provisions on ISDS which are not acceptable to the S&D Group, a majority in the European Parliament, and the general public.

Now, that could mean two different things. Either:

We do not want to see this opportunity jeopardized by the inclusion of provisions on ISDS, since these will be unacceptable.

Or:

We do not want to see this opportunity jeopardized by the inclusion of provisions on ISDS if they take a form that is unacceptable.

The first is a categorical rejection of corporate sovereignty in TTIP, the second is a rejection of certain kinds of ISDS, but not the idea itself. Clearly, then, the difference is significant: in the first case, S&D would vote against TAFTA/TTIP if it contains ISDS, while in the second, it might tolerate corporate sovereignty if certain conditions are met, and vote in favor of TTIP. That second position could well become that of the European Parliament itself. That's because the "draft report on Parliament's recommendations to the Commission on the negotiations for the Transatlantic Trade and Investment Partnership" (pdf), put together by the European Parliament's Committee on International Trade, includes the following paragraph on corporate sovereignty:

Given the EU's and the US developed legal systems, a state-to-state dispute settlement system and the use of national courts are the most appropriate tools to address investment disputes. Should ISDS provisions be included in the TTIP, it seems to be clear, that further reforms to the current model, are critical to avoid the problems that have arisen under the provisions in existing FTAs and BITs. Now that the results of the public consultation are available, a
reflection processes is needed within and between the three European institutions on the needed reforms. Investors abroad have to be treated in a non-discriminatory fashion and should have a fair opportunity to seek and achieve redress of grievances. This can be attained in TTIP without the inclusion of ISDS provisions.

This notes that ISDS is not needed in TTIP, but does not go so far as to reject it outright, and even speaks of what needs to be done "should ISDS provisions be included."

Clearly, then, the politicians are hedging here. They have noted -- how could they not? -- the huge rejection of ISDS by the public in the consultation carried out last year, and the 1.5 million signatures on the European petition against TTIP. But they are obviously unwilling to reject ISDS outright, not least because some MEPs, notably those from the conservative parties in the European Parliament, are largely behind TTIP, and do not want it jeopardized because of a statement that any form of ISDS is unacceptable.

What this means in practice, as in the US, is that the politicians will continue to try to gauge the public mood as they re-calibrate their responses. The latest statement by the S&D Group is part of that complex dance: an important rejection of corporate sovereignty, but by no means a definitive one.

ISDS has come under criticism because of some legitimate complaints about poorly written agreements. The U.S. shares some of those concerns, and agrees with the need for new, higher standards, stronger safeguards and better transparency provisions. Through TPP and other agreements, that is exactly what we are putting in place.

There are two massive problems with that assurance. First, the extreme secrecy of the TPP negotiations means that we have no idea just how strong those "safeguards" are. And secondly, in some sense it doesn't even matter: companies can use the mere threat of an ISDS action to cast a chill over future regulatory action. That's why the following comment is true but misses the point:

The reality is that ISDS does not and cannot require countries to change any law or regulation.

Carla Hills, the US Trade Representative who oversaw the NAFTA negotiations for Bush I and now heads her own trade-consulting firm, was among the very first to play this game of bump-and-run intimidation. Her corporate clients include big tobacco -- R.J. Reynolds and Philip Morris. Sixteen months after leaving office, Hills dispatched Julius Katz, her former chief deputy at USTR, to warn Ottawa to back off its proposed law to require plain packaging for cigarettes. If it didn't, Katz said, Canada would have to compensate his clients under NAFTA and the new legal doctrine he and Hills had helped create [ISDS]. "No US multinational tobacco manufacturer or its lobbyists are going to dictate health policy in this country," the Canadian health minister vowed. Canada backed off, nevertheless.

Nor was that an isolated incident:

A former government official in Ottawa told me: "I've seen the letters from the New York and DC law firms coming up to the Canadian government on virtually every new environmental regulation and proposition in the last five years. They involved dry-cleaning chemicals, pharmaceuticals, pesticides, patent law.Virtually all of the new initiatives were targeted and most of them never saw the light of day."

Zients goes on to say that corporate sovereignty chapters are needed because foreign courts can't be trusted to provide justice:

U.S. investors often face a heightened risk of bias or discrimination when abroad.

But Warren already answered that with several extremely powerful points:

Countries in the TPP are hardly emerging economies with weak legal systems. Australia and Japan have well-developed, well-respected legal systems, and multinational corporations navigate those systems every day, but ISDS would preempt their courts too. And to the extent there are countries that are riskier politically, market competition can solve the problem. Countries that respect property rights and the rule of law — such as the United States — should be more competitive, and if a company wants to invest in a country with a weak legal system, then it should buy political-risk insurance.

Zients also tries to argue that since the US hasn't suffered as a result of ISDS cases in the past, it'll be fine in the future:

There have only been 13 cases brought to judgment against the United States in the three decades since we’ve been party to these agreements. By contrast, during the same period of time in our domestic system, individual and companies have brought hundreds of thousands of challenges against Federal, state, and local governments in U.S. courts under U.S. law.

We have never lost an ISDS case because of the strong safeguards in the U.S. approach. And because we have continued to raise standards through each agreement, in recent years we have seen a drop in ISDS claims, despite increased levels of investment.

But that line of reasoning ignores why there have been so few cases in the past: because corporate sovereignty provisions were mainly included to protect US investments in developing countries with weaker legal systems. By definition, such nations are unlikely to have the resources to make many or significant investments in the US, and therefore have few opportunities to use the ISDS system. That is what will change dramatically with TAFTA/TTIP, as this analysis by Public Citizen explains:

TAFTA would vastly expand the investor-state threat, given the thousands of corporations doing business in both the United States and EU that would be newly empowered to attack public interest policies. More than 3,400 EU parent corporations own more than 24,200 subsidiaries in the United States, any one of which could provide the basis for an investor-state claim. This exposure to investor-state attacks far exceeds that associated with all other U.S. "free trade" agreement partners.

President Barack Obama may decide to kill Keystone XL for good, but that could be no easy task -- thanks in part to the North American Free Trade Agreement.

The 21-year-old free-trade pact allows foreign companies or governments to haul the U.S. in front of an international tribunal to face accusations of putting their investments at risk through regulations or other decisions. The CEO of Keystone developer TransCanada has raised the prospect as a potential last resort if Obama rejects the $8 billion project, although for now the company is focused on getting him to say yes.

Administration officials involved in reviewing the proposed Canada-to-Texas pipeline are aware of the potential for a NAFTA challenge and the importance of minimizing that risk in the event the president rejects Keystone.

So even though the President retains full powers to reject Keystone, it’s easy to see how the threat of a billion-dollar ISDS lawsuit might encourage him to approve it anyway. That would offer the perfect demonstration of how corporate sovereignty chapters can interfere with democratic decision-making -- at even the highest levels.

from the that-would-be-big dept

Techdirt hasn't written much recently about the trade agreement between the EU and Canada, generally known as CETA. That's because it is "finished" -- at least, in theory. It is now undergoing what is known as the "legal scrub" to prepare it for the final ratification on both sides. One story we did write concerned questions about the agreement's compatibility with EU law, largely because of the corporate sovereignty provisions in CETA. Things have been fairly quiet since then, which makes the following story in the Canadian edition of Huffington Post, on a related aspect, particularly intriguing:

German chancellor Angela Merkel will be in Ottawa for a visit on Monday, but she may not be bringing the news [Canadian Prime Minister] Stephen Harper wants to hear when it comes to the Canada-European Union Comprehensive Economic and Trade Agreement (CETA).

That's because the German government wants to reopen CETA and amend the investor-state dispute settlement [ISDS] mechanism.

No source is given for that claim, but the following explanation is offered:

Merkel likely does not have an ideological problem with bestowing corporations with the hammer of the investor-state provision, but the political reality is that her Christian Democrats have 311 seats in the Bundestag and need the support of the 193 Social Democrats in that legislature to maintain her 'grand coalition' government. Her minister of economy is a Social Democrat and that party is very clear in its opposition to investor-state. Last year, that party's convention passed a resolution against investor-state.

In other words, Merkel needs to keep her Social Democrat coalition partners happy if CETA and TTIP are to pass in the national vote that will be held at some point. That impacts CETA, because last month the same Social Democrat Minister of the Economy and Energy made a joint declaration with his French counterpart in which they said they wished to examine "all the options for changing" the ISDS chapter in CETA (original in French). The Huffington Post article also notes that what happens with CETA has big implications for TAFTA/TTIP:

Beyond the challenge of coalition politics for Merkel, she also needs to contend with an electorate that may not have paid too much attention to a 'free trade' agreement with Canada, but is very attentive -- and critical -- of the European Union's current negotiations with the United States on another 'free trade' deal called the Transatlantic Trade and Investment Partnership (TTIP). If Merkel agrees to a corporate rights provision in CETA, voters in Germany know that the same powers would be extended to U.S. corporations too.

If Merkel is indeed beginning to worry about the huge backlash in Germany against TTIP thanks to the corporate sovereignty provision it contains -- the main bone of contention for many people -- she knows that she must also deal with it in CETA, too. That would make a request to open up the ISDS section at least plausible, even if it would be pretty dramatic at this late stage, especially given statements by the Canadian Prime Minister that CETA's ISDS is non-negotiable. However, Harper has a general election coming up in October this year, and might prefer to accept CETA without corporate sovereignty rather than risk losing the political prize of a trade agreement with Europe altogether by refusing to renegotiate on this critical point.

The most widely cited projections for the growth impact of the TTIP are from the Centre for Economic Policy Research [CEPR] in London [in a study paid for by the European Commission] which shows the pact leading to an increase in GDP of 0.4 percent in the U.S. when its effects are fully felt in 2027, and 0.5 percent in the European Union. The analysis explicitly says that it will not lead to more jobs since the models are full employment models. It may lead to somewhat higher wages, but it is not a way to employ the unemployed. Furthermore, the discussion notes that in the transition, some workers may end up unemployed as the economies adjust to the new rules.

Implying that a deal that raises GDP by 0.4 or 0.5 percent 13 years out means "job-creating opportunities for workers on both continents" is just dishonest. The increment to annual growth is on the order of 0.03 percentage points. Good luck finding that in the data.

Recognizing that claims of substantial growth don't stand up to scrutiny, boosters of TTIP in Europe have resorted to a fallback technique: anecdote. If you can't prove something is good in general, show that it will be good for someone -- anyone -- and then extrapolate. Of course, that means you need to find an example of an industry that would definitely benefit from a US-EU trade agreement. An EU document on regulatory harmonization (pdf) from September 2013 gave a strong hint of which that might be:

The safety regulations that apply to cars are different in the US and the EU -- even if the end result is comparable levels of safety. In fact, it's already possible to drive some US- approved cars on European roads, under a special European approval system. Through TTIP, the Commission would like regulators to formally recognise that important parts of our two regulatory systems are broadly the same in safety terms.

Later in the same document we read:

Electric cars offer great potential to tackle climate change and pollution while boosting growth. Many companies on both sides of the Atlantic already sell them. Making them practical however will require new infrastructure as well as technologies and standards to ensure they are safe. That is why EU and US regulators and standard setters on both sides of the Atlantic are getting together early in this process to try to find common solutions that would allow for a
real transatlantic market.

And then:

One example is the whole area of car safety already mentioned. The political choice in this kind of regulation is that the car has to be safe. For example, doors need to be strong enough to withstand impact and airbags need to function perfectly.

It is striking how the anecdotal stories about the various ways in which the automotive industry would benefit from TAFTA/TTIP have become even more widespread recently. Here's the British MP John Healey, one of the main cheerleaders for TTIP in the UK, writing in October 2014 about the "potential gains" of the agreement. Guess which example he chooses?

Take the car industry -- a British success story; supporting hundreds of thousands of good manufacturing jobs across the country. Eight out of ten cars made in the UK are sold abroad, but we currently sell far fewer than we could to the US because of different regulatory rules. This needn’t mean standards are higher or lower. Just as we drive on the left and they on the right, some regulations are not better or worse, just different.

Take cars, we could look at the differences in our car crash tests or the way we check if the seat covers are flame-resistant. Reconciling small differences like these, without compromising on safety, would be a huge step forward.

Cars form a big part of the E.U.'s case for TTIP. They account for 47% of the increase in exports and 41% of the increase in imports in the best case scenario, with well over three times as many vehicles braving the Atlantic storms in one direction or the other than at present.

Since the gains for this industry are expected to be so large, and those for other industries so small, why not drop all the contentious stuff that threatens to derail the whole deal, and concentrate on cars? In any case, it would be more honest to rename the TTIP proposal as the "Atlantic Car Trade Agreement," since that's what it is really about. We could even call it "ACTA" for short.

from the chilling-effects dept

It has long been evident that TAFTA/TTIP is not a traditional trade agreement -- that is, one that seeks to promote trade by removing discriminatory local tariffs on imported goods and services. That's simply because the tariffs between the US and EU are already very low -- under 3% on average. Removing all those will produce very little change in trading patterns. The original justification for TTIP recognized this, and called for "non-tariff barriers" to be removed as well.

Those "non-tariff barriers" include regulations and standards introduced to protect the public -- for example, through health and safety laws or environmental regulations. Removing those "barriers" in order to increase trade might be great for companies, but increases the social costs through weakened protection for the environment, or greater health risks. The outcry caused by this prospect has led both negotiating parties to insist that TTIP will not lower standards.

But it's hard to see how those non-tariff barriers can be harmonized without a race to the bottom in terms of regulations, since no one is calling for a race to the top. Even "mutual recognition," which would allow both standards to be used, would inevitably see the lower standard becoming the norm because it would be cheaper to implement, and thus offer competitive advantages.

However, a leak back in December 2013 gave a clue about how it might be possible for the US and EU governments to promise that the TAFTA/TTIP agreement would not lower standards, and yet provide a way to dismantle those non-tariff barriers (pdf). This would be achieved after TTIP was ratified, through the creation of a new body called the Regulatory Council, which would play a key role in how future regulations were made. Effectively, it would provide early access to all new regulations proposed by the US and EU, allowing corporations to voice their objections to any measures that they felt would impede transatlantic trade. This regulatory ratchet would push standards downwards and reduce costs for business, but only gradually, and after TTIP had come into force -- at which point, nothing could be done about it.

Since then, things have been quiet on the regulatory front, not least because corporate sovereignty in the form of investor-state dispute settlement emerged as the most contentious issue -- in Europe, at least -- which has rather eclipsed earlier concerns about this supranational regulatory body. But now, in a single week, we have had two important leaks in this area, both confirming those initial ideas sketched out in 2013 are still very much how TAFTA/TTIP aims to bring about the desired regulatory harmonization.

According to the proposal, as soon as a new regulation is in the pipeline, businesses should be informed through an annual report, and be involved. This is now called "early information on planned acts", until recently called “early warning”. Already at the planning stage, "the regulating Party" has to offer business lobbyists who have a stake in a piece of legislation or regulation, an opportunity to “provide input”. This input "shall be taken into account" when finalising the proposal (article 6). This means businesses, for instance, at an early stage, can try to block rules intended to prevent the food industry from marketing foodstuffs with toxic substances, laws trying to keep energy companies from destroying the climate, or regulations to combat pollution and protect consumers.

Along with this new opportunity for lobbyists to try to shape, slow down or even block new regulations, the EU proposes to hand them a powerful weapon -- the impact assessment:

New regulations should undergo an "impact assessment", which would be made up of three questions (article 7, reduced from seven in the earlier proposal):

- How does the legislative proposal relate to international instruments?
- How have the planned or existing rules of the other Party been taken into account?
- What impact will the new rule have on trade or investment?

Those questions are primarily tilted towards the interests of business, not citizens. Thanks to the “early information” procedure, businesses can make sure their concerns are included in the report, and should it go against their interests, the report will have to cite a detrimental impact on transatlantic trade.

As Corporate Europe Observatory points out, the only criteria taken into account are impacts on trade or investment. So, for example, new environmental rules might well do wonders for reducing air pollution, but if they have an adverse effect on US or EU companies' sales or investments, they would be marked as undesirable. This is likely to have a severe chilling effect on bringing in new standards that protect the public but might impose new costs on business.

The Joint EU/US Financial Regulatory Forum shall agree on detailed guidelines on mutual reliance adapted for each specific area of financial regulation no later than one year from the entry into force of this agreement.

That is, the European Commission wants the US to sign up to TTIP without any specification of exactly how the new Financial Regulatory Forum will work, or what powers it will have. This seems a clear effort to sneak in elements later that the US is currently resisting.

What these important leaks confirm is that the regulatory co-operation that lies at the heart of TAFTA/TTIP would undermine sovereignty on both sides of the Atlantic. The Regulatory Cooperation Body would provide an important new forum for corporate lobbyists to intervene even earlier in the life of proposed rules and regulations than they do now -- and long before lawmakers have a chance to express their views. The end-result is likely to be an impoverishment not just of public policy-making, but of democracy itself.

from the a-necessary-factor dept

Glyn already covered European Parliament Member (and the EU Parliament's only Pirate Party representative) Julia Reda's report on copyright reform in the EU. However, for Day 3 of Copyright Week -- which is all about transparency, I wanted to focus on the other aspect of Reda's release of her report: just how transparent she's been. When we talk about transparency in copyright law, we're often talking about the lack of such transparency, often via international trade negotiations, like ACTA, TPP and TAFTA/TTIP, in which backroom dealing is done by unelected bureaucrats. The public is kept out of the negotiating process entirely, while lobbyists have full access. Combine that with the revolving door between the negotiators and the lobbyists themselves, and it's a recipe for non-transparent policy-making by which legacy industries get all the "gifts" they want.

Reda's approach with her report on copyright shows that it doesn't need to be that way. Along with the report, she detailed all of the 86 meeting requests she received from lobbyists regarding copyright (noting that the number went way up after she was appointed to write this report):

She also noted that she really wanted to "balance out the attention paid to various interest groups" and that she really wanted to speak to content creators directly, rather than middlemen:

Most requests came from publishers, distributors, collective rights organizations, service providers and intermediaries (57% altogether), while it was more difficult to get directly to the group most often referred to in public debate: The authors. The results of the copyright consultation with many authors’ responses demonstrate that the interests of collecting societies and individual authors can differ significantly.

The end result:

Meetings requested

RightholdersAuthorsAuthoritiesService providersAcademiaUsers

Meetings taken

She also includes a list of every lobbying meeting request she received on copyright:

This is great to see, and it would be nice to see others working on these issues post similar things. A few years ago, I noticed that while the USTR's FOIA website has a page for visitor logs, that page is conveniently left blank:

After many months of back and forth, the USTR finally sent me visitor logs in an almost entirely unusable manner. Here's one of the many documents that were sent:

Compare and contrast the two situations. One appears to be representative government. The other seems to be doing everything possible to hide what's really going on when it comes to important things like understanding who's influencing copyright policy.